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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5233 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  2d Session
                                S. 5233

 To amend the Internal Revenue Code of 1986 to treat certain gains and 
     dividends derived from counties of concern as ordinary income.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           September 25, 2024

 Mr. Ricketts introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
 To amend the Internal Revenue Code of 1986 to treat certain gains and 
     dividends derived from counties of concern as ordinary income.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``No Capital Gains Allowance for 
American Adversaries Act''.

SEC. 2. CERTAIN GAINS AND DIVIDENDS DERIVED FROM COUNTRIES OF CONCERN 
              TREATED AS ORDINARY INCOME.

    (a) In General.--Part IV of subchapter P of chapter 1 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new section:

``SEC. 1261. GAINS DERIVED FROM COUNTRIES OF CONCERN TREATED AS 
              ORDINARY INCOME.

    ``(a) In General.--Gain from the sale, exchange, or other 
disposition of specified country of concern property shall be treated 
as ordinary income. Such gain shall be recognized notwithstanding any 
other provision of this title.
    ``(b) Specified Country of Concern Property.--For purposes of this 
section:
            ``(1) In general.--The term `specified country of concern 
        property' means--
                    ``(A) any registered or unregistered security of a 
                company or other entity, as determined by criteria 
                established by the Securities and Exchange Commission 
                and the Secretary of the Treasury--
                            ``(i) which is incorporated or otherwise 
                        organized in a country of concern,
                            ``(ii) which has a majority of such company 
                        or other entity's assets or employees located 
                        in a country of concern,
                            ``(iii) which is owned by, controlled by, 
                        or subject to the jurisdiction or direction of 
                        a government of a country of concern,
                            ``(iv) where a majority of such company or 
                        other entity's value depends on the revenues, 
                        profits, market capitalization, assets, or the 
                        value of a security (including options to 
                        purchase or sell) of companies or other 
                        entities described under clause (i), (ii), or 
                        (iii), or
                            ``(v) where such company or other entity is 
                        controlled by any company or other entity 
                        described under clause (i), (ii), or (iii), and
                    ``(B) any property (other than securities) which is 
                located or used in a country of concern.
            ``(2) Additional definitions.--For purposes of paragraph 
        (1):
                    ``(A) Controlled by.--The term `controlled by' has 
                the meaning given that term under section 230.405 of 
                title 17, Code of Federal Regulations.
                    ``(B) Country of concern.--The term `country of 
                concern' means the People's Republic of China 
                (including Hong Kong and Macao and excluding Taiwan), 
                Russia, Belarus, Iran, and North Korea.''.
    (b) Dividends.--Section 1(h)(11)(C)(iii) of such Code is amended by 
striking ``and'' at the end of subclause (I), by striking the period at 
the end of subclause (II) and inserting ``, and'', and by adding at the 
end the following new subclause:
                                    ``(III) any foreign corporation 
                                described in section 1261(b)(1)(A) as 
                                of the date on which the dividend is 
                                paid.''.
    (c) Denial of Step-Up in Basis at Death.--Section 1014(a) of such 
Code is amended by striking ``or'' at the end of paragraph (3), by 
striking the period at the end of paragraph (4) and inserting ``, or'', 
and by adding at the end the following new paragraph:
            ``(5) in the case of specified country of concern property 
        (as defined in section 1261(b)), the basis in the hands of the 
        decedent.''.
    (d) Notice to Purchasers.--Not later than 180 days after the date 
of the enactment of this Act, the Securities and Exchange Commission 
shall issue rules requiring any person selling, exchanging, or 
otherwise disposing of a security that is specified country of concern 
property (as defined under section 1261(b) of the Internal Revenue Code 
of 1986) to notify the other party to such sale, exchange, or 
disposition that any gains related to such security are treated as 
ordinary income under the Internal Revenue Code of 1986 and not treated 
as capital gains.
    (e) Publicly Available List of Securities.--
            (1) In general.--The Securities and Exchange Commission 
        shall publish on the website of the Commission a list of all 
        securities described under section 1261(b)(1)(A) of the 
        Internal Revenue Code of 1986.
            (2) Reporting requirements.--The Securities and Exchange 
        Commission may require such reports as the Commission 
        determines necessary to determine which securities are 
        described under section 1261(b)(1)(A) of the Internal Revenue 
        Code of 1986.
    (f) Rulemaking.--Not later than 180 days after the date of the 
enactment of this Act, the Secretary of the Treasury and the Securities 
and Exchange Commission shall issue such rules as may be necessary to 
implement this Act and the amendments made by this Act, including 
establishing the criteria described under section 1261(b)(1)(A) of the 
Internal Revenue Code of 1986.
    (g) Effective Date.--The amendments made by this section shall 
apply to dispositions of property, and dividends paid, on or after 
January 1, 2025.
                                 <all>
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